KUALA LUMPUR, March 28 (Bernama) -- Bursa Malaysia closed lower today on profit-taking after a strong three-day rally, and investor sentiment was further shaken in the late afternoon session following news of an earthquake in Myanmar with tremors felt in neighbouring Thailand, said Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) slid 1.44 per cent or 22.08 points to 1,513.65, its intraday low, from Thursday’s close of 1,535.73. The benchmark index opened 4.16 points lower at 1,531.57 and hit an intraday high of 1,533.52 during the midday session. On the broader market, decliners outpaced gainers 563 to 395, while 408 counters were unchanged, 1,106 untraded, and 133 suspended. Turnover slipped to 2.25 billion units valued at RM2.13 billion from 2.52 billion units worth RM2.41 billion on Thursday.
Key Takeaways:
Stricter Semiconductor Monitoring: Malaysia will implement more stringent regulations on semiconductor shipments following U.S. pressure, particularly around high-end Nvidia chips. U.S. authorities have raised concerns that some of these chips, which are critical for artificial intelligence (AI) and data centers, are being diverted to China, circumventing export controls.
U.S. Demands Tight Tracking: U.S. officials have asked Malaysia to ensure that Nvidia chips entering the country are carefully monitored, guaranteeing that servers carrying these chips reach their designated data centers and do not end up being rerouted. Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz confirmed these demands, stating that the U.S. is pushing for more detailed tracking of chip movements.
Recent Legal Actions: The call for stricter regulations comes after a legal case in Singapore, where companies were accused of illicitly supplying U.S. servers to Malaysia in transactions worth approximately RM1.7 billion ($390 million). Singapore’s authorities have charged three individuals in connection with the case, which allegedly involves Nvidia chips being rerouted to China via Malaysia.
No Evidence of Misuse (Yet): Despite the U.S. accusations, Malaysian authorities have not found evidence that the chips ended up in unauthorized destinations within the country. Zafrul stated that investigations into local data centers have not uncovered any diverted shipments.
Malaysia’s Growing Role and Scrutiny: This move highlights Malaysia's pivotal position in the global tech supply chain, as the country faces increasing scrutiny from global powers like the U.S. Zafrul acknowledged the complexity of tracking semiconductors through global supply chains, noting that enforcing these regulations would be challenging despite its seeming simplicity.
Global Impact and Enforcement Challenges: Malaysia's new measures underscore the broader issue of securing semiconductor supply chains. With the U.S. pressuring companies involved in this complex web to ensure shipments are properly tracked, Malaysia is caught in the middle of geopolitical tensions over advanced technology exports, especially in the AI and data center sectors.
Investor Insight: This tightening of semiconductor regulations could impact Malaysia’s position as a key player in the global tech supply chain. While the country seeks to ensure compliance with international demands, its role in the supply of critical technology remains vital. The scrutiny surrounding chip exports could introduce volatility in the sector but also signal Malaysia's increasing importance in the global tech ecosystem. Investors should monitor any developments in the regulations closely, as they could affect both local industries and international partnerships in the tech and semiconductor sectors.
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